Understanding Average Days to Pay.
When you select Average days to pay, Sage 50 does the following:
- Performs calculations on your customers' paid invoices to determine the average number of days for each customer to pay invoices.
- Calculates the due date for invoices on the Cash Flow Manager based on this calculated average days to pay.
Give me an example
A customer has Net 30 days for their terms, but Sage 50 calculates the average number of days to pay for that customer at 20 days. If you invoice that customer on March 1, 2018, the Cash Flow Manager will show the expected due date for this invoice as March 21, 2018. If you select the actual transaction date, Sage 50 will show the expected due date as March 31, 2018.
How does Sage 50 calculate Average days to pay?
It takes the total number of days to pay all invoices in the system and divides by the total number of invoices. For example, a customer had five invoices and they paid the invoices in 28, 22, 15, 35, and 20 days. Sage 50 will add these five numbers and divide by 5, giving an average days to pay of 24 days.
When is Average days to pay recalculated by Sage 50?
Average days to pay is recalculated for a customer whenever an invoice for that customer is closed.
When is an invoice considered to be closed?
When the invoice has been paid in full, either with Receipts or Credit Memos, its status is changed to closed.